Order-to-pay Automation Drives Procurement Savings, Research

The automation of order-to-pay activities in invoice reconciliation and payment reduces invoice processing costs by more than 60 per cent, according to research by the AberdeenGroup, commissioned by Xign Corporation. It also found that automating order-to-pay can capture as much as 17.5 per cent savings on a significant portion of corporate spend. In the report, titled “Harnessing Payables to Capture A Second Wave of Procurement Savings,” Aberdeen contends that approaching procure-to-pay automation in a closed-loop fashion makes better use of supplier payables information for cost reduction and cash management activities, significantly increases supplier participation in automated invoice and payment programs, and improves alignment of purchasing with treasury and accounts payable. In addition, the report states that automating Order to Pay activities helps to establish and document business controls mandated by the Sarbanes-Oxley Act. According to AberdeenGroup estimates, the potential savings impact of additional improvements across the order-to-pay cycle could fall into the $153bn-$260bn range. This exceeds the previously booked savings from strategic sourcing and e-procurement efforts completed without a closed-loop, procure-to-pay process.


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